Wednesday, April 19, 2006

Motorola earnings disappoint - but revenues soar

Motorola has just announced results for their first quarter. Earnings disappointed, but revenues soared on the back of their Razr phone. The networks division was the weak performer - and one has to beg the question of whether they should spin it off.

Motorola said net income for the quarter dipped to $686 million, or 27 cents a share, from $692 million, or 28 cents, a year earlier. Overall sales leaped 23% to $10.01 billion from $8.16 billion, as Motorola bucked the typical trend of slower sales following the year-end holiday season.

And their market share of the handset industry bounced up another 4%. But investors sold their stock off on fears for the networks division as well as likely price and margin erosion for the Razr as Motorola push it out to the true mass market (including developing nations).

With the merger of Alcatel and Lucent, a spin off of Motorola's network division has to be considered.

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